Thu, October 28, 2021


Myanmar’s military-commercial complex

Myanmar's mighty military overthrowing the country's democratically elected government to take full control of power was a well-planned move. The Tatmadaw—as Myanmar's armed forces are commonly referred to—wielded significant power, even when Suu Kyi was apparently ruling the country. They were not only in possession of 25 percent of seats in the legislature, enabling it to veto constitutional changes, it was also in charge of major ministries such as defence, home, and border affairs. Aside from the political, the Tatmadaw has another source of power: commerce.

Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC), two of Myanmar's largest business conglomerates are owned and controlled by the Tatmadaw and its senior leaders, including the Commander-in-Chief Senior General Min Aung Hlaing, the man currently also ruling the country.

The tentacles of the behemoth conglomerates spread over key economic drivers, including energy, infrastructure, mining, banking, tourism and agriculture among other sectors. These companies have control of most of the country's vast resources and are used to boost the coffers of the Tatmadaw. As reported by a UN fact-finding mission, Myanmar generals control at least 140 companies, partially or fully. "The Myanmar military controls an extensive business empire that enables it to avoid accountability and conduct operations with impunity against ethnic groups, contributing to widespread human rights abuses," a United Nations report in August 2019 suggested.

Chairman of the UN Independent International Fact-Finding Mission, Marzuki Darusman, in an interview said that, "The Myanmar armed forces are enabled in a very enhanced way to act outside of civilian control and therefore perpetuate their impunity in their involvement in gross human rights violations".

And foreign governments and businesses are directly and heavily involved in trade ties with these Tatmadaw-controlled and supervised businesses. According to report by Barron's—a weekly American magazine published by Dow Jones & Company of News Corp. Chinese, Singaporean, Japanese and South Korean companies have direct collaborations and partnerships with the Myanmar Economic Holdings Limited (MEHL).

According to the same Barron's report, an MEHL subsidiary also "reportedly holds the largest number of jade mining licences".

And over the years, the Tatmadaw and its generals and high-ups have systematically fed on this commercial model for both collective and individual gains. According to an Amnesty International report in September 2020, in 2011 alone, General Min Aung Hlaing received USD 250,000 from MEHL in dividends.

Foreign companies such as US's Chevron, France's Total, have collaborations with Myanmar Oil and Gas Enterprise. The Amnesty Intentional report added that South Korean steel giant POSCO; the same country's property developer, INNO Group; manufacturer and exporter of clothing, Pan-Pacific; Singapore-based oil company, Puma; RMH Singapore, a Singaporean fund; Japanese multinational brewer, Kirin; Wanbao Mining, Chinese metal mining company; among other major foreign corporations have partnerships with the Tatmadaw owned Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC).

The Conversation last month reported that two very prominent British banks "have reportedly lent USD 60 million to a Vietnamese company building a mobile network in Myanmar. The Tatmadaw-controlled Myanmar Economic Corporation owns 28 percent of the network, known as Mytel." The report further mentioned that the Australian Government's, "Future Fund has invested 3.2 million Australian dollars (about USD 2.5 million) in a subsidiary of Indian multinational Adani, which is doing business with the Myanmar Economic Corporation."

In light of the Amnesty International report, Pan-Pacific said that it was terminating its operations in Myanmar. And while there had been growing calls on these foreign companies to sever business with MEHL and MEC, during the recent wave of the Rohingya genocide, it was only after the February, 2021 coup that Singapore based Puma and Japan based Kirin have announced to pull the plug on their operations in Myanmar.

Apart from the business collaborations with the MEHL and MCE of the companies, foreign countries are also directly investing in Myanmar. Singapore, China and Hong Kong are some of the major investors in Myanmar, with Singapore emerging at the top in the last few years. In 2019-2020 fiscal, the World Bank estimated FDI commitment to Myanmar would jump by one-third to USD 5.5 billion.

Major world powers have investments in the special economic zones in Myanmar, one of which is located in the Rakhine State itself: Kyauk Phyu. A Bangkok Post report in October 2019 suggested, "A total of 106 enterprises from 18 countries and four local businesses have ploughed in USD 1.84 billion" in SEZs.

The investors include, the United Kingdom, the United Arab Emirates, Malaysia, France, Switzerland, Australia, South Korea, Hong Kong, Singapore, Taiwan, Panama, China, Brunei, Vietnam, Austria, Japan, the Netherlands, and India, among other countries. A lot of this money is channelled to the control of the Tatmadaw, thanks to the more than hundred crony companies being run under MEHL and MCE.

Given the political and financial prowess of the Myanmar military and their growing trade ties with foreign countries and companies, one should not be surprised that they have toppled a democratically elected government with complete disregard to the wishes of its own people who elected Suu Kyi to power last year. Perhaps in view of the prevailing realities the response of the world community to the recent political development in Myanmar has been lukewarm, with the exceptions of a few countries.

The foreign actors working in partnership with Tatmadaw controlled holdings are as responsible for the Rohingya genocide and death of democracy in Myanmar, as the perpetrators themselves. The only difference is, while the military acted on the frontlines, the investors supported them with the resources to strengthen their position. 

Despite these, however, protests are growing in Myanmar calling for the return to democracy. Saffron-robed monks have joined the hundreds and thousands of people who are defying police brutality to press home their demand. While the army is cocooned in the strategically located new capital Naypidaw, where according to reports, military facilities "form something of a ring around the civilian buildings, which are closer to the centre, effectively reducing the power and strength of popular uprisings in the capital" (The Interpreter), the protests have spread to various corners of the country.

How the ongoing protests will affect the business operations in Myanmar, especially where foreign investments are involved will play a determining role in limiting Tatmadaw's financial resources. Manufacturers such as H&M have already said that they are monitoring the situation. If the protests continue businesses are likely to bear the brunt of it. For how long can the military resist internal pressure and how will the protests will impact the Tatmadaw's trade deals with foreign investors? That remains to be seen.

Published : February 14, 2021

By : The Daily Star